VICTORIA – The B.C. government is continuing to remake its unpopular “carbon neutral government” program, expanding a fund to return carbon offset payments to hospitals and post-secondary institutions for energy saving projects.

The new capital fund is an expansion of the “carbon neutral capital program” that was set up for B.C.’s 60 school districts in 2012. The fund is financed via a 2010 law that forces all public sector entities to pay $25 per tonne for greenhouse gas emissions from their operations.

Environment Minister Mary Polak announced Tuesday that carbon offsets from health authorities, colleges and universities will be added to the school capital fund, which districts apply to with energy saving ideas such as insulation or boiler replacement.

The carbon neutral government plan was controversial from the start, as school and health districts had to divert millions from their budgets to offset their heating, lighting and transportation emissions.

Its popularity didn’t improve when the first big carbon offsets chosen by the Pacific Carbon Trust included a gas well flare reduction program for Encana Corp. in northern B.C.

Then B.C.’s Auditor General reported that the flaring project and a forest preserve in the Kootenays were not valid carbon offsets, because both were underway before carbon offset money was offered to help them. The Pacific Carbon Trust was wound up last year, with offsets chosen by small group in the environment ministry.

The education ministry also announced Tuesday its latest energy saving project funded in 28 school districts. They include boiler replacements, heat pumps and electric cars. School bus emissions have been exempted from the carbon neutral government program since the beginning.